That’s according to analysts from the Economic Intelligence Center at the country’s Siam Commercial Bank (EIC-SCB).
They are forecasting the supplement market is expected to expand significantly in the next 10-15 years, growing at around 7% a year, thanks to health and wellness trends, rising incomes, and modern retail channels.
However, they warn as the society ages, the industry needs to adjust from a market strongly centred on beauty from within, to one which meets the needs of older consumers
Therefore, the first strategic move recommended is to offer dietary supplements tailored to special need of the elderly.
“Based on data from the United Nations, by 2030 the elderly population (those over 65 years of age) in Thailand will account for 20% of the total population. Upon that, the demand for dietary supplements will also change accordingly. It is, thus, important for businesses to understand the demands of elderly consumers, in order to offer products that suit their needs,” noted EIC-SCB.
It adds potential products include brain and memory boosters, or supplements that prevent or reduce the risk of diseases common among older people, such as heart disease, hypertension, arthrosis, diabetes, cancer, as well as problems with eyesight and hearing.
“Currently, only a handful of these products are available. For example, in the 3-billion-baht market for multi-vitamins supplements, only 3% are vitamins for the elderly, suggesting a large untapped market and tremendous business opportunities.”
The second suggestion is to boost research and develop dietary supplements and functional foods that are based on herbs or natural extracts, instead of synthetic supplements.
Analysts say the “Back to Nature” trend is very popular among today’s Thai consumers.
EIC research found that during 2011-2015, the natural supplements market grew on average as much as 13% yearly, compared to only 7-8% for the synthetic supplements market.
“This difference in growth clearly shows the impression among Thai consumers that natural supplements are safer and carry fewer side effects than synthetic ones. However, there is still only a limited variety of natural supplements in the marketplace, such as chicken essence, fruit extracts, or herbal extracts, perhaps partly because Thailand have not focused sufficiently on research and product development,” it added.
Thirdly, analysts say businesses can improve growth prospects by offering personalised nutrition products.
“By analysing customer’s physical data or DNA information, they can produce tailor-made supplements for each person's specific needs,” says EIC-SCB
It suggests there is scope for web-based companies in Thailand to make inroads into this market, as witnessed in more developed economies.
“This business model helps reduce administrative costs, such as those of running physical stores or managing supply chains, which constitute a major part of business costs. In addition, it can also help boosting brand competitiveness through the efficient exploitation of innovation and technology.”
Finally, analysts say supplement firms need to stop relying on the recent boom in beauty products, with the market finally showing signs of a slowdown.
The past five years saw impressive growth in the beauty supplements and functional foods sector, with acompound annual growth rate of 12% between 2011 and 2015. Top-sellers include supplements for skincare and for weight loss. However, in 2016-2017, the market's growth rate is expected to drop to 8-9% per year, with a knock-on effect on the sector’s overall 21% share of the total supplements market.
Experts say firms need to expand their consumer base away from the younger market by developing products that target both beauty and health concerns at the same time.
“Nowadays beauty and health concerns have become closely linked, yet the market has not responded well to the demand of high-potential consumers, who gravitate towards health supplements as they age. Pioneering a new product market that targets both health and beauty concerns may be the key to future success. At the same time, attention must be paid to products made of natural extracts, as the majority of consumers now rank natural extract ingredients as a key factor influencing their purchase,” said EIC-SCB.